Gulf Crudes Gain for Ninth Day in a Row as Brent Oil Strengthens

Feb. 8 (Bloomberg) -- Oils produced in the Gulf of Mexico
strengthened for a ninth day as Brent crude surged to a nine-month high in London.

Light Louisiana Sweet oil advanced $1.35 to a $22.35
premium to U.S. benchmark West Texas Intermediate crude oil at
11:55 a.m. in New York, according to data compiled by Bloomberg.
It was the longest streak of gains for the grade since July.
Heavy Louisiana Sweet increased $1.30 to a premium of $22.45 a
barrel.

Offshore oils strengthened as the spread between the price
of WTI and Brent, the global oil benchmark, widened by $1.73 a
barrel to a $23.14 premium for Brent as of 2:27 p.m. A rising
Brent price tends to boost U.S. offshore domestic oils, which
compete with overseas imports.

Canadian heavy oil strengthened for a fifth day as export
pipelines carrying the grade were less congested in February
than prior months. Western Canada Select, a heavy bitumen blend,
gained 75 cents to a $24.25 discount against West Texas
Intermediate, according to Calgary oil broker Net Energy Inc.

Canadian Pipelines

Apportionment on Canada’s largest oil export pipelines to
the U.S., a measure of demand for space on the lines, declined
for a third month in February. Extra production from the Kearl
oil sands project in Alberta was delayed to the end of the first
quarter, also freeing up space.

Enbridge Inc.’s Lines 4 and 67, transporting heavy oil from
Alberta to the U.S., were apportioned by 7 percent this month,
the lowest amount since September and down from 18 percent in
November, the company said in a Jan. 29 notice to shippers.
Apportionment is the amount of extra oil shippers ask to ship
beyond a pipeline’s capacity. The level of apportionment can
reflect oversupply in the market.

Lines 4 and 67 combined can transport as much as 1.25
million barrels a day to the U.S. from Canada, according to
Enbridge’s website.

Exxon Mobil Corp. said Feb. 1 that the 110,000-barrel-a-day
Kearl oil sands project won’t begin production until the end of
the first quarter and won’t reach full rates until the end of
the year. The extra-heavy oil supply was expected to start in
January.